Top refiner: The Esso Fawley Oil Refinery, operated by Exxon Mobil Corp, in Fawley, United Kingdom, is one of the top names in the refining industry. — Bloomberg
ROTTERDAM: Crude oil is the world’s most important commodity, but it’s worthless without a refinery turning it into the products that people actually use: petroleum, diesel, jet-fuel and petrochemicals for plastics. And the world’s refining industry today is in pain like never before.
“Refining margins are absolutely catastrophic, ” Patrick Pouyanne, the head of Europe’s top oil refining group Total SA, told investors last month, echoing a widely held view among executives, traders and analysts.What happens to the oil refining industry at this juncture will have ripple effects across the rest of the energy industry.
The multi-billion-dollar plants employ thousands of people and a wave of closures and bankruptcies looms.“We believe we are entering into an ‘age of consolidation’ for the refining industry, ” said Nikhil Bhandari, refining analyst at Goldman Sachs Inc. The top names of the industry, which collectively processed well over US$2 trillion worth of oil last year, are giants such as Exxon Mobil Corp and Royal Dutch Shell Plc.
There are also Asian behemoths like Sinopec of China and Indian Oil Corp, as well as large independents like Marathon Petroleum Corp and Valero Energy Corp with their ubiquitous fuel stations.
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